Car owners face widespread negative equity on vehicle loans

7 articles · Updated · AutoGuide · May 1

The problem is concentrated in years two to five of 72- and 84-month loans, with some owners owing $40,000 on cars worth $25,000.
High-trim mass-market models, luxury SUVs and electric vehicles are especially exposed as used prices normalise after pandemic-era supply disruptions and interest-heavy repayments lag depreciation.
The strain may curb maintenance spending, weaken late-model used-car quality, and push risky debt rollovers, while gap insurance and keeping vehicles longer are presented as the safest responses.

Is the auto debt crisis a true financial time bomb or just the new normal for today's car owners?

Millions are trapped by car debt. Is the system rigged against buyers or are consumers making poor choices?